Living it up a little before retiring?

[robnplunder]

First post here.

I have been saving all my life (51 years and ticking) and want to retire soon (around 55) before I get too old to enjoy retirement. But I am afraid that once I retire, I won't be able to spend money freely even if I have enough. So, while I have a cushy job, I am trying to live it up a little before FIRE. By this, I mean doing things that I would not normally do while I was in "save" mode: dining at top rated restaurants, buying luxury car, playing in fancier golf course, traveling abroad on tour (no backpacking), etc.. Of course, I am doing/will be doing these without reducing my future retirement fund. In fact, I will still be saving but at lesser rate and will retire with $2M in the asset. Has anyone else done this - splurging before retirement b/c once retired, you just can't (or reluctant to do so)? Opinions? Thoughts?

 

[pb4uski]

A bit. DW and I bought ourselves a jetski for our double-nickel birthdays in 2010. Your plan sounds sensible to me. Nothing wrong with a little splurge now and then as long as you can afford it.

 

[braumeister]

Even once you retire you can do things like that if you like.

Travel is a wonderful way to spend money IMHO, and something you will enjoy less as you age so earlier is better.

As long as it can fit in your long term plan, go for the gusto!

 

[Danmar]

opposite with us. We splurged after retirement because we had more time and more money.

 

[LOL!]

We're not particularly splurging, but we are "practicing" retirement while still employed.

This year one of us has been to Italy, Turkey, Hawaii, Colorado, Manhattan (twice), DC, NC, PA, New Zealand, Australia. Before year-end there should be additional travel to Colorado, Seattle, and Australia completed. OK, most of this was business travel with vacations days tacked on, so it really didn't cost much.

 

[Packman]

After living the last 20 years before ER well below my means, it's sometimes hard to spend more. I will spend on the discretionary items I prize the most (like travel and dining out), but why do I still have to get a "deal" on these things before I feel comfortable in doing so?

 

[foxfirev5]

The idea of practice retirement is beginning to have an appeal to me. Tomorrow my DW and I leave on another vacation courtesy of miles and points earned at megacorp. I'm not too sure I will easily spend MY money this way in retirement.

 

[robnplunder]

After living the last 20 years before ER well below my means, it's sometimes hard to spend more. I will spend on the discretionary items I prize the most (like travel and dining out), but why do I still have to get a "deal" on these things before I feel comfortable in doing so?

+1. Life long habits are hard to break.

 

[sengsational]

+1. Life long habits are hard to break.

Agreed, which makes it easy to LBYM. To the OP, I wonder if you are doing yourself a disservice, though. If post retirement trips that are a little less posh would leave you feeling a bit let down for all future lower budget trips.

 

[RE2Boys]

but why do I still have to get a "deal" on these things before I feel comfortable in doing so?

My feelings exactly, just a life-long habit that got me where I am now but still practiced even though the need is no longer as important. Couldn't just go out and buy a new car, still had to shop around for an exceptional value (two year old used car with low miles at 65% of sticker). Anything else would have given me the uneasy feeling that I was financing someone's lifestyle.

 

[robnplunder]

Agreed, which makes it easy to LBYM. To the OP, I wonder if you are doing yourself a disservice, though. If post retirement trips that are a little less posh would leave you feeling a bit let down for all future lower budget trips.

Good point. But the thing is, with what I have in saved up money, I don't think I can afford too many "posh" trips after I retire. If I want to have the posh trips during retirement, I probably need to retire at 60 (not 55 as I am planning now).

 

[RunningBum]

There's nothing wrong with enjoying better things once in awhile, but I don't agree with your rationale on the money.

Of course, I am doing/will be doing these without reducing my future retirement fund.

If you are spending on extras instead of saving, you are reducing your retirement fund. Not a problem, since you plan to save enough for retirement and enjoy the extras, but the fact is that you could either retire a bit earlier, or be able to enjoy some extras in retirement if you weren't spending it now. It's just a choice. Some people would rather take retirement ASAP. I preferred to work a bit longer to put away enough to enjoy some nice things both while working and in retirement, though I don't go overboard.

I have the same kind of reaction when I hear about people who do things like move up putting on a new roof just before retiring, or replacing their car early. There's no difference between spending that money in retirement or while working, except that by deferring it until it is actually needed you put off the next time replacement needs to be done.

Ongoing expenses like fine dining and entertainment actually are a bit different, so maybe it is best to do it now and use retirement as a signal to live with fewer luxuries.

 

[W2R]

opposite with us. We splurged after retirement because we had more time and more money.

+1 Me, too. It's a lot more fun when you don't have to go in to work the next morning.

 

[tulak]

This is very much how we live. As long as we meet our savings goal and are on track to retire, I don't mind splurging a bit. This includes pricier home improvement projects in our possible retirement home to international travel with the entire family. We even pay private school for our kids.

Sure, we could save a lot more and stop working sooner, but as it is we'll probably stop working when the kids either leave for college or when they're done with college. In the meantime, the work isn't bad and the extras we opt for make our lives more enjoyable.

 

[Midpack]

We splurged when we were young and stupid (me, not DW ). But there's no right or wrong answer. If you want to splurge just before you retire, or after, whatever you plan for is right for you.

Don't worry what others may think or say, they don't know enough about your personal situation to have a meaningful opinion...

 

[NW-Bound]

If one is getting near his "number", the additional annual saving becomes a smaller percentage of the "number", and the market fluctuations also dwarf that addition. Your additional savings might be 1 or 2% of portfolio, while the market might add or subtract 5 to 10% easily. So, after a bull market run like we have had, I do not see any harm in "rebalancing" that additional saving into some fun activities.

What if something happens to you in the 4 years to retirement, throwing all your plans out the door? I have seen unexpected things happen to people while they are planning. The potential harm I can see is that one might get used to it, and the lifestyle creep may become more than the SWR can support.

First post here.

I have been saving all my life (51 years and ticking) and want to retire soon (around 55) before I get too old to enjoy retirement. But I am afraid that once I retire, I won't be able to spend money freely even if I have enough. So, while I have a cushy job, I am trying to live it up a little before FIRE. By this, I mean doing things that I would not normally do while I was in "save" mode: dining at top rated restaurants, buying luxury car, playing in fancier golf course, traveling abroad on tour (no backpacking), etc.. Of course, I am doing/will be doing these without reducing my future retirement fund. In fact, I will still be saving but at lesser rate and will retire with $2M in the asset. Has anyone else done this - splurging before retirement b/c once retired, you just can't (or reluctant to do so)? Opinions? Thoughts?

 

[traineeinvestor]

I came very close to going the other way and cut spending this year - the concern being that once I got into the habit of spending more it would be difficult to stop. So we are going to wait a year or two to adjust to the idea of not having any employment income before deciding whether or not to increase the spending.

I guess I just worry too much.

 

[48Fire]

First post here.

I have been saving all my life (51 years and ticking) and want to retire soon (around 55) before I get too old to enjoy retirement. But I am afraid that once I retire, I won't be able to spend money freely even if I have enough. So, while I have a cushy job, I am trying to live it up a little before FIRE. By this, I mean doing things that I would not normally do while I was in "save" mode: dining at top rated restaurants, buying luxury car, playing in fancier golf course, traveling abroad on tour (no backpacking), etc.. Of course, I am doing/will be doing these without reducing my future retirement fund. In fact, I will still be saving but at lesser rate and will retire with $2M in the asset. Has anyone else done this - splurging before retirement b/c once retired, you just can't (or reluctant to do so)? Opinions? Thoughts?

Yes, bought a nice new car and second home. Wanted to have some of those costs and expenses behind me and known for ER.

 

[UtahSkier]

DW and I are pursuing a similar strategy as you have described. I'm 51 as well. Our current portfolio could support a comfortable retirement at a certain expense level. But, my current lifestyle exceeds that expense level. So, DW and I choose to continue working and spending without touching the portfolio.

While we are working, we make sure we are stress free and happy every day. DW works 20 hours a week while I work 30. We take many vacations; some budget and some more expensive, so we have a lot of variety and activity. We dine out quite a bit and try to cook with premium products we enjoy.

For us, retiring on the current portfolio will require some adjustments which we are prepared for... when the time is right.

I think having fun is job #1. "Cushy Job" doesn't sound stressful to me. If so, working, spending ("living it up"), and staying consistent with the ER plan is quite acceptable.

Personally, the only no-no here is using the portfolio as the means to "live it up".

 

[robnplunder]

If one is getting near his "number", the additional annual saving becomes a smaller percentage of the "number", and the market fluctuations also dwarf that addition. Your additional savings might be 1 or 2% of portfolio, while the market might add or subtract 5 to 10% easily. So, after a bull market run like we have had, I do not see any harm in "rebalancing" that additional saving into some fun activities.

What if something happens to you in the 4 years to retirement, throwing all your plans out the door? I have seen unexpected things happen to people while they are planning. The potential harm I can see is that one might get used to it, and the lifestyle creep may become more than the SWR can support.

Very good point. Enjoy the moment so to speak. And if things go wry, I can maybe work one more year to recover.

 

[robnplunder]

I think having fun is job #1. "Cushy Job" doesn't sound stressful to me. If so, working, spending ("living it up"), and staying consistent with the ER plan is quite acceptable.

Well, it's only cushy in financial way. The job is stressful b/c my boss is, well, is like the boss character in The Devil Wears Prada movie. Currently, I am trying very hard to put up with him until I retire on my own term and time.

 

[RISP]

robnplunder, I'm 20 years younger than you (and, coincidentally, about 20 years from being FI), but I absolutely expect to do something like that once my time has come. Once FI, if I don't hate my job by then, maybe I'll just keep working for a while and treat myself to some luxuries I'm currently denying myself. I'm thinking nicer used car, bespoke suit and shirts, hand-made shoes, Brioni ties, big-screen TV, fancy dining, posh travel etc. Stuff I don't really need, and will probably never have the budget for in retirement either, but that I'd like to have tried at least once.
I could of course afford some of it today, but it would severely delay becoming FI, and that's my #1 priority for the next two decades (or however long it will take).
I guess it will depend how much I dread being at work in my 50s. If I feel that I'm wasting my life in the office, I'll walk away with no regrets in my off-the rack shoes and suit, drive my used Toyota to my modest home, and watch a ballgame for free on my old laptop via an Internet streaming site.

 

[Jack_Pine]

Since we are waiting for a work event (LBO kind of thing) and feel we are set for our dollar goal now.......

We are buying some things now we will use in retirement. Feel more comfortable getting them now while income is still flowing plus we can enjoy them now as well. This would include, upgraded boat, third ATV for cabin and snow mobile. The big one will be to trade travel trailer for motor home to snow bird.

Not the same a s travel or going to expensive dinners........

 

[NW-Bound]

Speaking of travel, I had the fortune to work on and off, and 20-30 hrs/week at that, for 9 years before I threw in the towel for good. Meanwhile, my wife had more than 4 weeks of vacation due to seniority at her megacorp.

So, we traveled for quite a bit prior to retirement, but we did not splurge. We figured we would continue this into retirement so we were planning for the long run. We stayed at small family-run inns or budget chains like Ibis. A couple of times, we did stay in more expensive places, like right off the Arc de Triomphe on Champs-Élysées, one night in London, or that time in Monaco, but only for 1 night or 2 each. We want to stretch our budget, so we can travel more. As long as we had a comfortable bed and a clean bathroom, other things mattered little as we were out and about and not stayed in the hotel anyway.

 

[2B]

DW and I have ramped up vacation spending once her parents no longer needed her care. That had reduced her free time to travel plus being more than a couple of hours away made everybody nervous. That period went on almost 6 years and it's been over for the last 3 (or so). In that time it became obvious to me that even if I continued saving 40-50% of my gross income, it had a relatively minor effect on our NW. It was only increasing the size of my children's inheritance.

I've been a OMY-er for several years. We have a prety nice lifestyle even though we've lived below our means for many decades. I've looked at every calculator I can find. I-ORP and FireCalc are the ones I like best and they both agree that I can retire now with an after tax income slightly higher than what I have now.

At this point I've pretty much opened the gates on travel. What I've found is that DW balks at going on overseas trips more than twice per year. She has about the same tolerance for domestic trips that don't involve our son or her sister. So, I am still saving about 25% of my gross.

I don't see how any reduction in spending now, even if I actually did retire (and I still might this year), would improve my standard of living later. Our kids have complained about all the traveling that we are doing now that we didn't do when they were smaller. I reminded them of the never ending activities they all were in one time or another that frequently went on all year. I also reminded them of how they complained when we did go on short vacations.